CIOs are expected to know all about the business they serve. Business people don't need to know about IT. But what they don't know can hurt them.

It’s not enough for CIOs to be technology experts
any­more; they have to know the business, too. If the CIO
“doesn’t get it,” he or she can get the
boot.

Yet that dual expectation doesn’t apply to
businesspeople. They get a bye when it comes to understanding
IT. Rare is the CEO who knows the difference between enterprise
architecture and landscape architecture.

“Businesses are confused about technology,” says
Karim R. Lakhani, an assistant professor in technology and
operations management at Harvard Business School. He says that
many businesspeople suffer from—and tolerate—IT
ignorance in part because IT discussions have traditionally
focused on the technology itself rather than on how the product
of IT—information—affects business operations.
“CIOs should reduce the emphasis of the ‘T’
side and push the ‘I’ side,” he adds.
It’s a forgotten part of the business in most
organizations. The CIO has to step up—nobody else is
thinking about it.”

That might explain why only 29 percent of CEOs think their
CIOs are proactive leaders in the business, though 59 percent
are satisfied with the CIO’s per­formance, according
to a survey by consultancy Forrester. “This is not a good
sign for CIOs,” says Laurie Orlov, the Forrester analyst
who produced that survey. “CEOs have low expectations,
and IT is enabling those expectations.”

CIOs need to educate their business counterparts about
technology, but that is easier said than done. For example,
last year Orlov produced a series of reports on how CIOs can
educate their business counterparts. She says CIOs expressed
strong interest in the topic, and she pro­posed running
seminars for business executives. A CIO at a com­pany she
wouldn’t disclose hired her to come down and talk to
senior management about her ideas.

When the CEO got wind of the plan, he canceled the
meeting.

“He actually said it was a bad use of executive
time,” she says, noting that the same thing had happened
with at least one other CIO. “This is a political
nightmare for CIOs,” she adds.

MARKETING IT

CIO columnist Susan Cramm explains how to market IT
to business people in "IT
Marketing Smarts." You can also visit this
website
at Forrester Research for two reports on educating businesspeople about IT.
(Note: registration is required.)

Education Equals Value

Thankfully, it’s becoming easier to show real,
demonstrable value from imparting more IT literacy to
businesspeople. Assuming that a company where IT and the
business are aligned is also a company where the business side
is more knowledgeable about IT and its strategic potential, the
data is compelling. For starters, 45 percent of CIOs in aligned
organizations expect they’ll create competitive
advantages for their business in 2007, versus 30 percent of
CIOs at unaligned organizations, according to the 2007
“State of the CIO” survey. Aligned CIOs say they
spend only 21 percent of their time proving IT’s value,
versus 37 percent for unaligned CIOs. (And there’s a nice
personal benefit for aligned CIOs: They make about $50,000 a
year more.)

As the numbers show, better IT education of the business
leads to alignment, which leads to better technology
strategies, which lead to competitive advantage. CIOs need to
connect the dots for their business executives and show them
how IT education can impact their profits. We’ve found
some CIOs who say there are ways to teach the business side a
few technology lessons without making anybody wear a dunce
cap.

Jargon Free

At American Airlines, Monte Ford, senior vice president and
CIO, bangs one drum over and over again with his staff:
Don’t use technology jargon.

He knows that worrying about acronyms must look trivial to
an outsider. But “it’s huge,” he insists.
Here’s why: Techno-talk “creates another language
and a set of barriers between you and your business
partners.” Acronyms don’t educate; they actually
block education by creating arcane word barriers to real
learning.

Ford thinks that poor com­munication is the main problem
between IT and the business. So he also works with his staff to
talk about technology as simply as possible, focusing more on
what the business can accomplish with it than on how it works.
Ford wants them to do it consistently, too. In fact, whenever
he’s discussing a new kind of technology or strategy, he
spends a good amount of time with his staff developing a
template for any presentation that will be made on the topic,
to make sure the same format, terms and even pictures are used
every time. He says that it’s a way of branding the IT
strategy and subtly educating the business, because eventually
the businesspeople see it often enough that they understand
it—and can even do presentations themselves.

Learning With Budgets

American’s Ford says he has each business unit present
its case for what it wants to spend on technology (using the
presentation templates his group has developed). He uses the
budget planning period to help drill in what the business side
needs to know about technology.

“They get more tech savvy, to the point where
they’re smarter about the implementation of technology
within the business unit than we are,” Ford says. And
when that happens, he gets to challenge his team and ask,
“How come you don’t know more than they
do?”

Information Flows

Thomas Cullen, CIO at Peet’s Coffee and Tea, says
it’s important for CIOs to start education at the top of
their organization. “It’s critical to get executive
support,” he says. But simply trying to teach them how
ERP systems work would be a disaster, he says. Instead, he
delivers IT education to senior executives via carefully
crafted discussions about information flows in the business.
Cullen, who joined Peet’s in May 2006, set up a series of
meetings with the CEO, the CFO and the vice president of
operations to develop what he calls a ‘core process
map’ for the business. It’s a blueprint that he
will use to buy a new ERP system and set strategies for other
IT needs down the road.

The four (along with a consultant hired to help develop the
map and bridge any communication gaps) met four times for about
two hours over a two-month period in January and February 2007
to develop the blueprint. Each meeting focused on Peet’s
current business operations, possible future improvements and
how IT can support them. Now that the top executives at
Peet’s are better educated about IT, Cullen feels ready
to sell his strategy to executives lower in the hierarchy. He
has created a curriculum for teaching lower-level employees how
new systems will change the way information flows and how that
will in turn change the way people at the company work.
“I wanted to make sure the top people knew how difficult
the change management is going to be—it’ll change
the way people do their jobs and how some of these teams
function,” he says. He has already met with top managers
just below the C-level executives at Peet’s,
get-to-know-you meetings that he will use to tailor his remarks
about technology when he meets with them and their staffs.

Lab Time

At Austin Energy, CIO Andres Carvallo and his staff organize
one- to two-day “visioning” offsites to talk about
technology needs. Depending on the business unit, these happen
either annually or every six months and are jointly planned by
IT and the business units.

Carvallo uses the offsites to acquire demo equipment and
software from his vendors (at no cost) that he consolidates in
a kind of central laboratory. “We take those tools and
deploy them in a world with no constraints,” says
Carvallo. For example, he might show executives what it would
look like if, say, Austin Energy were truly paperless, or how
work orders and customer notification would change if Austin
Energy had fully deployed remote sensors in the field,
connected to the company’s ERP systems. That lets him
show the business side what exactly might happen with
technology advances they perhaps have heard about from articles
they’ve read, or industry conferences. He rotates
executives through the labs roughly every 90 days, because he
adds new pieces once every month or two.

“The executives are running so fast they hardly ever
get to stop and breathe and see the ocean at peace, so
it’s important to bring them in there to have
epiphanies,” Carvallo says. He keeps the epiphanies from
spinning into unrealistic expectations by putting project
requests through a rigorous vetting process that includes
evaluation by a steering committee that ranks their importance
to strategy and ability to satisfy regulatory obligations. Each
request also needs a business sponsor and a commitment to
funding.

Job Rotation

One of the oldest—but surest—ways to teach people
new skills is to immerse them in the environment you want them
to learn about. Monte Ford at American says that he has an
informal rotation program in which he courts talented
businesspeople and brings them into the IT organization for up
to three-year stints while also negotiating with business units
to take interested IT staff. When he brings businesspeople into
IT, Ford likes to joke that he then gives them “full
frontal lobotomies,” but the real key for American is
that both IT and business executives learn how to work together
more effectively. Swapping environments “feeds on itself
and creates this sort of symbiotic relationship with the
business unit and technology staff,” Ford says.

Obstacles Remain

Despite these examples of success, Forrester’s Orlov
cautions that most CIOs will find it difficult to get their
CEOs on board with a technology program. CIOs can’t
simply ask their CEOs whether they want to learn more about
technology. A more subtle approach is required. For example, a
CIO might point out to one executive that her unit has lower
customer satisfaction levels or higher people costs, and
suggest a technology that might help. If that fails, a similar
conversation with the CEO might help.

Orlov says that business executives sorely need to learn
about IT, given the waves of innovation happening in the field.
She thinks businesses are falling behind a series of new
technology curves, and cites things like the paucity of RFID
sensors in place to help track processes and products.

“A lot of CEOs just don’t have an appreciation
of what IT can do for them,” she says. And if the CEO
doesn’t want to know, “the CIO is going to be
hard-pressed to get the CEO to do something for IT.”

Michael Fitzgerald is a freelance technology writer who
can be reached at michael@mffitzgerald.com.